Daily Market Comment (24/05/2013) 

Wheat futures continued the positive run of recent times by posting sharply higher values at the close of yesterday’s session in Chicago. Following the release of data showing unexpectedly high export numbers, and amidst rumours that China was doing much of the buying, there was a short covering rally as the market scrambled to buy back short positions. In other news, Britain has raised its forecast for wheat imports and Algeria and Tunisia bought considerable volumes of export wheat.

Chicago Wheat for July 2013 is 14¾ cents higher at 703¼ US cents a bushel.

Corn started the day off in a strong position, however later in the day the old to new crop calendar spreads broke lower. Strong demand for ethanol continued as a supportive element for corn futures, and the weather for next week may potentially delay planting in some US states, or alternatively, if the rainfall is light, it may support soil moisture levels for newly planted corn. Export sales for old crop were unimpressive, however new crop sales were certainly stronger, coming in at 341,600t, above expectations.

Chicago Corn for July 2013 is 3½ cents higher at 662 US cents a bushel.

Canola took stock of the gains made during trading on Wednesday and judged them to be overdone, which in addition to a strengthening Canadian dollar drew futures lower overnight in Winnipeg. Further to this, improving conditions for planting across Western Canada and the presence of a vast volume of South American soybeans in the global oilseeds market contributed to the downside. Continuing to support canola futures were tighter old crop stocks and a focus by farmers on sowing in Canada, rather than selling.

Winnipeg canola for July 2013 is $4.90 lower at $642.40 Canadian Dollars per tonne.

The Australian dollar is currently trading at 0.9745 USD.